05-01-2024, 08:52 AM
Bursa listed Perdana Petroluem is 64% own Bursa listed Dayang. Dayang is basically an oilfield services company with a small marine charter segment. However in 2015 it acquired Perdana which is mainly in the marine charger business.
When you look at the ROE for these 2 companies over the past decade, you can see Dayang outperforming Perdana.
![[Image: Perdana-vs-Dayang.png]](https://i.postimg.cc/D0446Sft/Perdana-vs-Dayang.png)
From a fundamental perspective, why would you want to own Perdana? From a risk mitigation perspective, Dayang is more diversified.
Of course the elephant in the room is whether Dayang made a mistake in acquiring Perdana. With hindsight it was better not to do so.
Moral of the story? Many companies have both organic and acquisition growth. But not all acquisitions added value to the shareholders.
When you look at the ROE for these 2 companies over the past decade, you can see Dayang outperforming Perdana.
From a fundamental perspective, why would you want to own Perdana? From a risk mitigation perspective, Dayang is more diversified.
Of course the elephant in the room is whether Dayang made a mistake in acquiring Perdana. With hindsight it was better not to do so.
Moral of the story? Many companies have both organic and acquisition growth. But not all acquisitions added value to the shareholders.